Microsoft founder and chairman Bill Gates has admitted the obvious: Microsoft's beginning strategy for mobile phones was a failure. When asked why it failed, he had this to say: "That's too complicated."

When asked if he was pleased with the way that Ballmer was running Microsoft, he said:

"Well, he and I are two of the most self-critical people -- you can imagine. And there were a lot of amazing things that Steve's leadership got done with the company in the last year. Windows 8 is key to the future, the Surface computer. Bing, people are seeing as a better search product, Xbox.

"But is -- is it enough?" No, he and I are not satisfied that in terms of, you know, breakthrough things, that we're doing everything possible."

Later on in the interview, he admitted about his tenure at Microsoft, "There are a lot of things like cellphones where we didn't get out in the lead very early." When asked why, he answered "That's too complicated," and tried to fend off the question. When Rose persisted, he said:

"We didn't miss cellphones, but the way that we went about it didn't allow us to get the leadership. So it's clearly a mistake."

He's right about that. Microsoft's handling of mobile is likely the worst mistake the company ever made. Microsoft built and released a smartphone years before the release of the iPhone. But it hamstrung it by putting an operating system on it that essentially mimicked Windows, rather than starting from scratch and thinking what a mobile operating system should be. Apple, rather than copy the Mac OS, designed an operating system specifically for smartphones.

If Microsoft had done mobile right years ago, the iPhone never would have gone on to become such a success, and Apple would not be the dominant player in mobile. Microsoft would own mobile as well as the desktop.

Microsoft, though, still thinks of Windows as the center of its universe, and I believe that's why it hasn't had breakthrough products in recent years. Microsoft needs to accept that Windows will never dominate the world the way it once did, and focus its attentions accordingly.